Sacramento— Today, Assemblyman Curt Hagman (R-Chino Hills) introduced AB 856, which modifies Corporations Code to allow limited liability companies (LLC’s) the same exemption from certain securities laws that corporations enjoy.
“Assembly Bill 856 will permit smaller businesses to utilize many of the same funding sources corporations have access to already,” said Assemblyman Hagman. “This step will help both startups and established businesses having trouble getting loans to raise money.” Hagman added.
Currently, corporations are permitted to issue shares to official investors in addition to investors meeting roughly half the net-worth or annual compensation amounts required of an accredited investor. LLC’s are limited to accredited investors only. This amendment is a logical step in allowing LLC’s to garner the operating capital they will require in today’s more restrictive funding markets.